Very upset with PenFed

[calmloki]

Am i the only one who expects this sort of snafu with banks or escrow companies or whatever? Far more often than not we find problems with payments getting credited, or how they are credited; inability to access an account because the password is wrong/the software has been changed; Marge from accounting went postal and torched her office; the only one who knows the system is on vacation, and on and on. It has always worked out. We

1: get paper records and file them
2: enter everything in Quicken and reconcile monthly
3: track when payments are to be made and check to be sure they have been so made
4: expect that screwups happen and just make sure they get corrected
5: focus on benefit to us - if the positive exceeds the negative.. baby/bathwater
6: eat a red - or turkey - it will all work out

 

[Surfdaddy]

Maybe, maybe not. They can't do the volume of business they do with a lot of human [-]inter[/-]action.

Well it sure is funny the Citibank, who is MUCH bigger than PenFed, can manage to call me at home whenever they see a charge they don't like on my CC.

 

[Surfdaddy]

Does anybody know if PenFed will be open on Friday?
When I call them again I'm going to ask about getting in writing what they did with my money. Of course I can't "change my address" since I'm not longer an official customer!

They apparently had my correct street address with an adjacent city. I don't know whether *I* slipped on the zip code (I don't see how I would have entered the wrong city name) or whether they made the mistake. If they use zip to overrule the city name, then that could have caused the city to be incorrect. I would really like to see that application form again.

It will be interesting to see what my emails to the Chairman of the Board bring.

My biggest worry is somehow that after the 8-10 week wait for the property search, Virginia could claim they can't find my money. I put a large sum in a federally insured institution with an assumption of complete safety. Now my worst case concern is that my money could be gone. I won't feel better until Virginia identifies that they have the funds. I'm sure I'll have to jump through a bunch of hoops to identify myself before I can get at them.

At this point the lost interest is really secondary. I just want my principal.

 

[calmloki]

Does anybody know if PenFed will be open on Friday?
When I call them again I'm going to ask about getting in writing what they did with my money. Of course I can't "change my address" since I'm not longer an official customer!

They apparently had my correct street address with an adjacent city. I don't know whether I slipped on the zip code (I don't see how I would have entered the wrong city name) or whether they made the mistake. I would really like to see that application form again, although I doubt I will get a chance to see it.

It will be interesting to see what my emails to the Chairman of the Board bring.

My biggest worry is somehow that after the 8-10 week wait, Virginia claims they can't find my money. I put a large sum in a Federally Insured institution with and assumption of complete safety. Now my worst case concern is that my money could be gone. I won't feel better until Virginia identifies that they have the funds. I'm sure I'll have to jump through a bunch of hoops to identify myself before I can get at them.

At this point the lost interest is really secondary. I just want my principal.

With the calm that having no money at risk brings I want to tell you don't worry, be happy. It will all work out. Your money is not gone, it's just not where it's supposed to be. Nobody is trying to steal it. I would be very surprised if Penfed doesn't help you in whatever ways possible to get this resolved. Find it often helps if i ask people what they can do to help - get them on your side solving the problem rather than making them adversaries.

 

[braumeister]

I had a bizarre problem (account disappeared) with PenFed a couple of years ago. Happened to notice it when I went online to check things (which I do at least a few times a month). Called them up and had it straightened out in a few minutes.

Computers do odd things from time to time, but my experience is that if you can get to a human and talk to them reasonably, just about anything is fixable.

 

[Rustward]

Well it sure is funny the Citibank, who is MUCH bigger than PenFed, can manage to call me at home whenever they see a charge they don't like on my CC.

Penfed:Inactive Account / Citibank:Suspected CC Fraud

Apples / Oranges

 

[Surfdaddy]

Penfed:Inactive Account / Citibank:Suspected CC Fraud

Apples / Oranges

You indicated that they can't do customer phone calls with their "high" volume of business. I was just pointing out that a MUCH higher volume of operation business (even though different) has no trouble making phone calls to its customers.

 

[NW-Bound]

With the calm that having no money at risk brings I want to tell you don't worry, be happy. It will all work out. Your money is not gone, it's just not where it's supposed to be. Nobody is trying to steal it. I would be very surprised if Penfed doesn't help you in whatever ways possible to get this resolved. Find it often helps if i ask people what they can do to help - get them on your side solving the problem rather than making them adversaries.

Yes, in all likelihood, it will work out like Calmloki wrote.

Still, one can understand how the OP got upset when his money just went "Poof". This line made me smile: "Your money is not gone, it's just not where it's supposed to be." Hey, that is exactly the same problem Madoff's customers have. Well, it is not quite the same, as in the latter case, no one knows where the money has gone. Maybe up in the "money heaven". But what is money?

People will not readily admit to this, but there is some "Scrooginess" in all of us. When it comes to money, it already requires a bit of faith on our part to be willing to not hold it in a tangible form like Krugerrand or Maple Leaf gold coins. We are told to trust fiat paper money (paper? with magic ink printed on it?), and then next to turn it in, in exchange for some computer bits that we can barely see on our computer screen. And now, the OP cannot even see his "numbers". Those computer bits and bytes have been moved to the computer owned by the state of Virginia. What if there is a power outage, and those bits get reset to 0? No worry, they tell us. There is a backup copy of those bits on a tape or a backup disk stored in a vault. "Your bits are safe", they assure us.

Oh, what is real in this world? Why is it that when I see my number getting increased at the end of a trading day that it makes me happy? It is just a number. It goes up and it goes down. But I like it more up than down.

 

[JohnDoe]

I would really like to see that application form again.

They should have an scanned version of it they can email you.

Curly, dividends are not considered activity, but credit card transactions and subsequent payments would reset your activity date if you pay it from a share.

Also, remember, this is usually only after 5 years of 'inactivity' and not being able to contact you by letter - multiple times. I couldn't find PenFed's definition of dormant.

JD

 

[calmloki]

..... We are told to trust fiat paper money (paper? with magic ink printed on it?), and then next to turn it in, in exchange for some computer bits that we can barely see on our computer screen. And now, the OP cannot even see his "numbers". Those computer bits and bytes have been moved to the computer owned by the state of Virginia. What if there is a power outage, and those bits get reset to 0? No worry, they tell us. There is a backup copy of those bits on a tape or a backup disk stored in a vault. "Your bits are safe", they assure us.....

Be much cheaper and faster to take down a country that is well dependant on computer data tracking credit cards and contract payments and pretty much all transactions by tossing a massive glitch into the system. Kind of like when the market fell by hundreds and thousands of points because.... well, do we really know why it fell? Fumble fingered trader? Yeah right - I'm betting on some government somewhere trying out a bit of country-crashing software.

Of couse seeds of doubt about the security and safety of the electronic banking system are as dangerous and effective as actual security failures - kind of like how the terrorists are winning by costing us millions and billions in cash and lost time defending against attacks that may never take place with, say, airport scanners.

Have gold, have paper money - if the computersystem all goes kerflooey and I can't access my PenFed CDs a bit of paper money will hold us through the weeks(?) it takes to get back on line.

 

[Rustward]

You indicated that they can't do customer phone calls with their "high" volume of business. I was just pointing out that a MUCH higher volume of operation business (even though different) has no trouble making phone calls to its customers.

I fully understand what you are saying. . . and credit unions are mostly member owned and run on much smaller margins than big banks. That is how they are able to offer "better deals" than big banks. Been a credit union member for about 27 years (can't remember when I joined), and occasionally I think of them as "cheap" but then I realize that that "cheapness" gets returned to me in the form of higher interest rates on deposits, lower rates on loans, and lower fees.

It is unfortunate this happened to you. I don't think you need to worry about getting your money back -- you should get it all back except for possibly some fees, and you are in a good position to ask for any fees to be reversed. I wish you good luck.

 

[Dave J]

Surfdaddy,

This is a real bummer for you. I can't imagine they will not help you recover your money.

Did you not notice that you did not receive a 1099INT when you did your taxes each year?

I've been with PenFed for about 9 years and no problems so far, but your problem is wild.

 

[Stevewc]

I know this thread is about the bum deal the OP is dealing with but here's a positive article I just read.
Just to put a little different slant on the conversation.
Or the other side of the coin.
Of course most all you folks know this already.

The Last Great CD Rate - CBS MoneyWatch.com

Steve

 

[Nords]

What if there was a U.S. government bond yielding 3.49%, and had a put option that gave you the right to sell it at $96.51 per $100 if the bond bubble bursts? Well, there is with the Pentagon Federal Credit Union seven year CD, yielding 3.49 percent APY.
The risk of a bond bubble
Interest rates are at a historic low. The current seven year treasury is paying 1.90 percent annually, according to the US Treasury. And with a seven year maturity, this bond’s small payment translates to a 6.6 year duration, which is a geometric average of when you get your money back.

Holy cow, Roth, it's a freakin' seven-year CD. Who gives a flying hoot whether it's the equivalent of a put or a 6.6-year geometric-average duration Treasury?

Reminds me of trying to [-]interpret[/-] read one of Bill Gross' columns...

 

[jazz4cash]

I guess the Moneywatch artical is a good reminder of why it's sometimes worth the hassle of poor customer service to get access to superior products. The true measure to me is how the institution responds. I expect Penfed to step up and make things right. If they do, I will be much less disappointed at the whole incident.

I kinda enjoyed the over-analysis / CD vs. Bond comparison. I get raised eybrows from folks when I confess to buying CD's.........but If I told them I bought a 7 yr bond with an attractive put option they would be impressed!

 

[haha]

Well it sure is funny the Citibank, who is MUCH bigger than PenFed, can manage to call me at home whenever they see a charge they don't like on my CC.

Because they may get stuck with it.

 

[veremchuka]

what a mess and if i were the op i'd be worried about va having my money too! i hope you get it squared away, $60k is a lot of money to have floating around "somewhere"!

i have considered a penfed cd down the line some time but now that's not even a possibility when reading this thread. penfed should see this and realize their screw up can turn off thousands of potential or current customers.

 

[Surfdaddy]

Surfdaddy,

This is a real bummer for you. I can't imagine they will not help you recover your money.

Did you not notice that you did not receive a 1099INT when you did your taxes each year?

I've been with PenFed for about 9 years and no problems so far, but your problem is wild.

So I have an update.
I received an email late today in response to my email to the Chairman of the Board.
They indicated that they had made an error, they apologized and said my accounts should not have been escheated (I now know what that word means!). They indicated that even with a dormant share account, there should not have been an escheat because I had a certificate with them. They indicated that the funds had not yet been sent to the state government, so they re-opened my accounts and put the money back in!

So of course I immediately went online. They had already fixed my address based upon my email to them.

It appears from the statements online that I have retrieved at this point (I never used to get them as they were always available online. No more - I will always download and save them.), they had my correct name, address, phone number, and email address. My zip code was also correct, but the city was an adjacent city. So they must have been receiving USPS notifications of a bad mail address. I don't know how they would have had my correct zip but a wrong city name. There was also nothing in the monthly statements to indicate that the share account was dormant. In their email they did indicate that they would work on the idea of an email notification to users.

IMHO they could have done a lot more to prevent this. The ONLY error was the name of the city. All other information was correct, including the zip code. My error was not being diligent enough (lessons for everybody for all of their financial institutions). You are also correct, I did not receive the 1099-INT and me not noticing this was my mistake. I have a lot of mutual funds, bank accounts, and investment accounts and I never really connected that I had not received any 1099s from PenFed.

The only remaining error is that they show interest posting in my CD on 10/16, and on the same day they closed the account for unclaimed funds. When they reopened the account today, the balance does not include the 10/16 dividend. So that is a relatively minor remaining issue and I will speak with them on Monday.

I do appreciate that they quickly responded and that I don't have to go through an unclaimed property situation. I have learned something here, and I hope they can clean up their processes a bit.

 

[VaCollector]

So I have an update.
I received an email late today in response to my email to the Chairman of the Board.
They indicated that they had made an error, they apologized and said my accounts should not have been escheated .....

Best part of this whole discussion....nice to hear someone step up to the plate and say "sorry" or "whoops" or SOMETHING instead of quoting rules and regulations!

I for one appreciate the reminder to be diligent regarding my accounts!

Thanks for the post and very happy to hear that things are working out!!

 

[Spanky]

Surfdaddy,
Thanks for sharing your story, which could be a wake-up call for all of us about tracking our accounts. Speaking of dormant accounts, we did receive an email and letter from Etrade advising that we make some transactions or face the risk of losing the money to the state.

 

[NW-Bound]

They indicated that the funds had not yet been sent to the state government, so they re-opened my accounts and put the money back in!

...

I did not receive the 1099-INT and me not noticing this was my mistake. I have a lot of mutual funds, bank accounts, and investment accounts and I never really connected that I had not received any 1099s from PenFed.

All right! We all like a good ending.

About the missing 1099-INT, does that mean you did not put that on your past tax returns? No worry though. It is most likely the IRS already knows about it, and will be contacting you soon to ask for the missing tax, plus the interest on it. It may take them 2 or 3 years, but they will get to it. Don't ask me how I know.

Yes, I also have many accounts, and one 1099 form got lost in the mail one year.

 

[Dave J]

So I have an update.
I received an email late today in response to my email to the Chairman of the Board.
They indicated that they had made an error, they apologized and said my accounts should not have been escheated (I now know what that word means!).

That is great. In my 25 years of long distance banking/investing, I have had a couple instances similar(not my mistake)(not PenFed) and they have always been taken care of at no cost/loss to me.

One took 4 months, when my savings and loan sent my entire IRA(20k), instead of the 5k I ordered to 20th Century Investments, who invested the entire amount in the fund I had chose , and this happened 2 or 3 days before the crash of 1987. My 20k became 15k overnight. Those were the days before the Internet, and I did not find out about the mistake for a week or so.

This was my first try at mutual funds. Imagine my shock. After both sides, pointed fingers at each other, blaming each other and lawyers copying me their letters, 4 months later I was made 100% whole.I "think" the saving and loan ate the loss because they sent more than the paperwork showed, but I'm not sure.I was made whole,so I was happy.

At the time, that 20k was probably 75% of my small net worth, excluding my home.

 

[Curly]

So I have an update.
...
They indicated that the funds had not yet been sent to the state government, so they re-opened my accounts and put the money back in!
.

Mr. Surfdaddy: I want to thank you for telling your story and following up with PenFed's response. I think we (particularly me) have learned a lesson from your experience and appreciate the time you have taken to share it with us.

Aside from the niggling lingering issues of restating the accumulated interest you are due and the potential to incur an IRS late tax payment penalty, it looks like this situation has worked out fairly well (notwithstanding your lost sleep and stress).

However, I'm curious about PenFed's treatment of your funds during a time when they thought you had an inactive account. What credit union bucket did they put the money in if it wasn't in your account and it wasn't sent to the State? Can we infer from PenFed's statement that they have a inactive/dormant holding account that is a bucket of "found money" that they keep and perhaps never send it to anyone. In my increasingly skeptical view of banking procedures I can envision that an institution could declare an account inactive and simply keep the money - resulting in a new found source of bank income. I am still keenly interested in seeing PenFed's written policies associated with inactive and/or dormant accounts.

 

[calmloki]

Surfdaddy - ah. all's well that ends well. Good to hear Penfed got on the stick and made things right. Our most recent financial flub involved getting reimbursed for education expenses by the Oregon 529 plan. They sent the entire amount in the 529 plan for the wrong kid to our bank rather than the $500 they should have sent from the right kid's account. Sigh. it got returned and put back in the plan, but we will have an extra tax form this year to explain why we shouldn't pay tax on the earnings from that apparent sale and reinvestment. Nowhere near the numbers you were dealing with though!

Mistakes happen - it's how they get fixed that counts.

 

[jazz4cash]

Thanks for sharing your experience and the followup. I am VERY relieved with the response from Penfed, although I am sure some would feel they could/should do more.

I think we all got a wake up call to double check our contact info. I had a problem once where I had filed a change of address at my credit union, but somehow it only applied to my deposit account and not my credit card, so I think sometimes these problems are inevitable and email vs. snail mail is not a fix all.

I feel that USPS has some responsibility as well, and I would make contact with the local postmaster as well. Since the zip code was correct, I think the mail was deliverable. Might consider filing a COA for the incorrect address.

As for the 1099INT discussion, I recall PenFed sends a combined 1099INT/DIV where they list the various accounts line by line, so it wouldn't be so hard to overlook this.